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Kingston, Inc. management is considering purchasing a new machine at a cost of $3,847,361. They expect this equipment to produce cash flows of $889,402, $913,431, $887,951, $1,103,872, $1,261,357, and $1,298,868 over the next six years. If the appropriate discount rate is 15 percent, what is the NPV of this investment? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

The NPV is          $

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Briarcrest Condiments is a spice-making firm. Recently, it developed a new process for producing spices. The process requires new machinery that would cost $2,056,046. have a life of five years, and would produce the cash flows shown in the following table.

What is the NPV if the discount rate is 15.07 percent? (Enter negative amounts using negative sign e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25.)

Problem 10.17

Creative Solutions, Inc., has just invested $5,472,361 on equipment. The firm uses payback period criteria of not accepting any project that takes more than four years to recover its costs. The company anticipates cash flows of $521,437, $851,975, $1,174,854, $1,454,131, $3,186,392, and $2,437,008 over the next six years.(Round answer to 2 decimal places, e.g. 15.25.)

What is the payback period of this investment?

Problem 10.32

Jekyll & Hyde Corp. is evaluating two mutually exclusive projects. The cost of capital is 15 percent. Costs and cash flows are given in the following table.

Calculate NPV and IRR of two projects. (Enter negative amounts using negative sign, e.g. -45.25. Round answer to 2 decimal places, e.g. 15.25 or 12.25%.)

Problem 10.10

Capitol Corp. management is expecting a project to generate after-tax income of $65,027 in each of the next three years. The average book value of the project’s equipment over that period will be $258,596. If the firm’s acceptance decision on any project is based on an ARR of 37.5 percent. (Round answer to 2 decimal places, e.g. 5.25%.)

What is the project’s accounting rate of return?

Problem 10.22

Sycamore Home Furnishings is considering acquiring a new machine that can create customized window treatments. The equipment will cost $282,001 and will generate cash flows of $64,256 over each of the next six years. If the cost of capital is 14.59 percent, what is the MIRR on this project? (Round answer to 2 decimal places, e.g. 15.25%.)

c. What is the IRR, and what would be the decision based on the IRR? (Round answer to 2 decimal places, e.g. 15.25.)